Accounting Theory and Current Expenses Issues

Accounting Theory and Current Expenses Issues


Question:

Discuss about the Accounting Theory and Current Expenses Issues.

Answer:

Introduction:

The research company Bio-sustainable Feeds (BSF) Ltd., is an Australian company listed at ASX. The company is engaged in research of sustainable aqua-culture feeds. The plant based feed is developed from canola, corn, soya-bean, sunflower, etc. The total R&D cost stood up at $360 million. The target of the company is to make sure that it can create an aqua feed with is less costly. It is always known fact that fish based feed to the fish is costly and the low cost alternative can save millions and bring significant margin to the company. This paper will analyze the role of the company engaged in research of the aqua feed. The acquisitions of some of the environmentalists objected to that research on diverting human-quality food crops into growing luxury fish (ASX, 2016).
The company is in the business of growing feeds from wood chips, sugar cane residue, or recaptured methane gas. There is some success in the business of the company and the R&D business has grown significantly. The company is also receiving various grants from various intuitions to boost R&D. the company itself has invested significant amount in building R&D capacity of its own to make sure that it achieves required product and the technology. Once the technology is developed it would significantly boost the business and help it to gain significant amount from patent selling and patent leasing.
The value of research is significant in terms of economy and the resources it saves once it is successful. The R&D process would boost the company significantly. The need is to ensure that the R&D saves signifi8cant cost to the company and also ensure that it helps to create a value in economy. The company is poised make significant growth if it achieves the target of developing feed from canola, corn, soya-bean, sunflower, etc. This will save producing fish feeds from fish. The economic benefit for that research would be immense. BSF Ltd. has already spent $100 million AUD a year on alternative aquaculture feeds apart from $500 million AUD grant from the Commonwealth Scientific and Industrial Research Organization (Investopedia, 2016).


It is expected that patent would raise $700 million if sold for two years and $200 million AUD a year for 10 years if produced and sold. This is simplest expectation of growth in the market. It is also expected that savings of other natural produce would be significant and will ensure other produce will be saved. The R&D cost of the project may be significantly high but it will bear fruit in the long run and the company would gain handsomely and the contribution to the economy would also be significant in terms of money value and saving of other natural resources. The good quality foods can be saved for humans and malnourished. It is therefore expected that this research would boost the company immensely (Dbtmarineprog, 2016).

References:

ASX, 2016. Annual General Meeting. [Online] Available at: http://www.asx.com.au/asxpdf/20160418/pdf/436kwng9dkn2sf.pdf [Accessed 13 September 2016].
Dbtmarineprog, 2016. R&D. [Online] dbtmarineprog.gov.in Available at: http://dbtmarineprog.gov.in/?q=node/75 [Accessed 10 September 2016].
Investopedia, 2016. Research And Development (R&D) Expenses. [Online] www.investopedia.com Available at: http://www.investopedia.com/terms/r/research-and-development-expenses.asp [Accessed 10 September 2016].

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